Big question from the Greece crisis: Do history and geography trump economics?

How did Greece, the country of Archimedes and Socrates and Plato and Pythagoras, come to such dire straits, asks Ajit Balakrishnan.

Like any Indian schoolboy, or should I say any schoolboy anywhere in the world, I was reared on a staple diet of Greek wisdom. Thus, at an early age I learnt the Pythagoras theorem (the square of the hypotenuse equals the sum of the squares of the other two sides of a triangle), of Archimedes leaping out of his bathtub shouting 'Eureka!' after his having solved some complicated scientific puzzle, of Sophocles's play Oedipus Rex, and the story of how the Greeks outwitted their Trojan opponents with their horse.

So when I finally got a chance to visit Greece I could not contain my excitement. I looked forward to seeing, if not meeting, wise, bearded Socrates-like men in white robes, contemplating the universe, beautiful Athena-like athletic women, taking in the theatre and things like that which would elevate me from my obsession with emerging technologies.

My first sense of disconcertment was when I dipped into travel writer Paul Theroux, who had never failed me when I looked for a quick half-hour brief on any country. The Pillars of Hercules, a Grand Tour of the Mediterranean was everything I expected except when it came to Greece.

Theroux's usual satire, about being bored by the unending serious of museums bursting with art, I could take; but when he wrote, 'The whole of Greece seemed to me a cut-price theme park of broken marble, a place where you were harangued in a high-minded way about Ancient Greek culture while some swarthy little person picked your pocket,' I felt that he had gone too far. Greece, he concludes, for all its cultural pretensions, is just another third-world country.

When I did get to Greece everything that Mr Theroux had warned his reader about turned out to be true. Our hotel receptionist warned us about the need to watch out for pickpockets (pickpockets in the country of Socrates?); young men lolled around in doorways in the middle of a working day with no apparent job in hand. Since that trip, I have been pursuing an answer to the Greek puzzle: how can the country of Archimedes and Socrates and Plato and Pythagoras have come to such dire straits? And such questions have started reverberating incessantly in my head during the past few weeks, as news headlines trumpeted the imminent fall of Greece if they missed returning a gigantic loan to their bankers.

In a world where the economic situation is not what it used to be, what is it about Greece that makes it so vulnerable? Economists rattle off the usual litany of "problems": high fiscal deficit (translation: government spending far in excess of government income) caused by poor government income (translation: not enough tax revenues caused by citizens evading taxes or the government giving excess tax breaks) and excessive government expenses (translation: too many people on the government payroll). This is an easy-to-understand account of events that would apply or nearly apply to practically every country in the world. Why does this become a "crisis" when it happens to Greece?

I guess, for one, Greece can threaten to leave the European Union -- that grand coalition of former world powers like France whose only place in world politics is as part of Europe. If Greece leaves, then who knows, Spain and Portugal may be next, Italy may not be far behind and England may break its already tenuous link with the European project.

From that stage, losing the managing directorship of the IMF, seats in the UN Security Council, and a central role in international trade bodies like WTO and GATT are sure to follow. Europe will go back to its pre-colonial era status as a minor backwater in a world dominated by China, the US and India. The Europeans don't want that awful eventuality to come to pass, and thus will keep helping out Greece.

Why are the Greeks unable to take the minimal steps that other countries faced with similar circumstances have taken (the Chinese under Deng Xiaoping in the 1970s, England in the 1980s under Margaret Thatcher, India in the 1990s) to restore their financial health? The formula is by now well known: cut government expenses, sell off loss-making public enterprises and devalue your currency to buy time till other improvements kick in.

But what stops the Greeks? For one, by adopting the euro, they have given away the weapon of devaluation. The search for answers to the Greek puzzle gets interesting when we look beyond this.

Suzanne Daley, for example, writing in the New York Times, wonders whether the Greek defiance (or refusal to accept economic reality, depending on which side you are on) possibly springs from 'a deep cultural and historical strain of defiance in apparently hopeless situations, honed over centuries under Ottoman rule and nurtured by the telling of heroic tales from one generation to another'. She quotes a Greek journalist as saying that in the Greek psyche, there is this notion of glorious resistance against overwhelming odds.

The revenge of history may extend further. A rising Europe through the 18th century in some way, not fully identified or acknowledged yet, created the Greek mythology: Europe as the origin of civilisation, the 'Enlightenment', Europe as the creator of mathematics and science: all this was necessary as part of the 'civilising mission' arguments that justified colonialism.

Greece with all its monuments and myths possibly provided all the props for this. People with names like Socrates and Plato and Archimedes possibly existed, but all that is attributed to them is worth a second look.

But then, all the drama being enacted in Europe may just be a prelude to what Robert Kaplan calls The Revenge of Geography, in his eponymous book. 'Charlemagne's First Reich in 800', he says, 'was a great shifting blob of territory that, at one time or another, encompassed Austria and parts of Switzerland, France, Belgium, the Netherlands, Poland, Italy and Yugoslavia'. There was a brief respite when Martin Luther split Western Christianity and ignited the Thirty Years War that devastated Central Europe. Could it be that Europe seems destined to be ruled from what now corresponds to Germany?

Ajit Balakrishnan, chairman and CEO of Rediff.com, is the author of The Wave Rider, A Chronicle of the Information Age. He can be reached at ajitb@rediffmail.com